Knight Frank and Markit: London house prices experienced the biggest increase this month
London house price growth is expected to beat all other regions this month despite a slowdown in the top of the market, new research has shown.
Londoners perceived the biggest increase, followed by those in the South East, East of England, Scotland and then the North West.
It's slightly surprising given price growth among prime central London properties has been tailing off recently, but is most likely to have been buoyed by the imminent stamp duty changes.
The research also showed households in all UK regions expect house prices to rise over the next 12 months, and the strongest growth is expected in the South East.
Some 25.1 per cent of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while four per cent said that prices had fallen. This resulted in a house price sentiment index reading of 60.5.
It's now the 36th consecutive month that the reading has been above 50. Any figure above this mark shows prices are rising, and the higher it is, the stronger the increase.
“The fundamentals for the UK housing market remain steady, especially around mortgage costs which remain at record lows," Gráinne Gilmore, head of UK residential research at Knight Frank, said.
“The imbalance between demand and supply of housing is also underpinning house prices. The delivery of new homes remains some 30 to 40 per cent below the levels needed to start to address the annual shortfall of housing in the UK."
But Tim Moore, senior economist at Markit, warned: "“Households’ current price sentiment is stronger now than at any time over the past 17 months, but the economic landscape is not lacking in potential headwinds for buyer confidence."
"In particular, UK pay growth is uneven at best and slowing at worst, while at the same time some lenders have started to lower their maximum loan- to-income ratios."
"Stretched affordability is of course never far from any discussion of UK house prices – but it could bite harder now for first time buyers, especially in London and surrounding hotspots.”